Shining a Light on Corporate Handouts

By Ada Fuentes-Zullo & Sam Nelson

For years, corporate accountability advocates demanded governments provide more transparency around the sweetheart economic development deals lavished upon profitable companies at the expense of taxpayers. However, much of that may be about to change. Those looking to shine a light on the impact of corporate incentives scored a major victory by ushering in a new rule that will help communities hold corporations accountable for paying their fair share.

In 2015, the GASB released rules clearly outlining a process for states and municipalities to report losses from corporate tax breaks. As a result, data on corporate tax breaks should be available this year. In the past it was hard to calculate whether corporate tax breaks were used to evade property taxes. With the new rule, citizens now have information that can be used to hold local governments accountable for corporate handouts and measure how they harm our communities.

Why is accountability important? Too often local governments dole out tax breaks to large corporations, with little regard of their impact on the community.

Profitable and successful corporations like Amazon and Walmart lobby states and local governments to spend public funds to subsidize their businesses on the promise of job creation. The key word is promise. Often the jobs that are created as a result of the taxpayer-supported incentives are small in number. These jobs rarely pay the bills. And corporate handouts come at a high cost.

The new rule couldn’t come at a better time. When local governments are cutting municipal and public school budgets, along with other vital social services, working people have new means to ensure that public funds are invested in ways that sustain communities and put people, and not corporations, first.